Home

http://www.theage.com.au/opinion/politics/citizens-awake-and-cast-ye-off-the-chains-of-home-ownership-20101212-18tvj.html


This comment got my attention –

Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.

While the article above really talks about the security of having some place to call home, there’s something the article really misses.

It confuses buying a home with owning a home. They are not the same thing.

Owning a home really means you don’t owe anyone any debt (yes I know, governments really own the land, hence the concept of property tax, but work with me here)

The concept of paying mortgage to some financial institution is really spending 30-40 years buying a house. Oh sure they give you a deed, and on paper it looks like you ‘own’ the property (at least that’s the way the government sees it, since they come to you for the aforementioned property tax).

For the longest time, the concept of equity (which is what the mortgage payment really represents) has been a nice way to placate the middle class into thinking they are moving up in society. And for the longest time it was true.

But the fact is, over the last 20 years, if one has missed payment or two, they are usually not that far away from getting kicked out and losing it all. And truthfully, most people in this day and age are so early into their mortgage that none of their payments are really giving them any real equity at this point. Payments are mostly to cover off the interest in the loan (the ability to negotiate anything beyond that either is not available or not readily apparent).

Removing the concepts of equity and security out of it, then it’s all really no different than renting a house, isn’t it? It’s a dream sold to most people into believing that if they stick it out long enough, they’ll have something to hold onto and call their own at the end of it all. Indeed it’s a dream I’ve bought into.

For most people now, that dream is turning into a nightmare. Many are finding out that absent the equity and security, the ownership and investment in a house is no longer there, but the responsibility and obligation(s) still are. Add to that declining incomes, rising prices and more bills to cover and you have a recipe of financial collapse.

The housing crisis represents a clear case of the eradication of the middle class.

It’s not wonder today that society is slowly moving to extremes. Many people today are awash in debt.


I've always felt that the major strengths of the United States rested in two places, both of which are derived from generally one source: the middle class, and small busineses. I believe there are strong connections from the latter to the former. One can see the future when one looks at how both are treated. We don't need to look elsewhere because we know what each extreme represents.
 
We are slowly moving towards those extremes. Today and tomorrow, there are and will only be really two kinds of people who live in homes: Those who own them, and those who don’t. While I believe myself to be an optimist-at-heart, without knowing what possible solutions there are to address this future problem, I'm at a loss to stay positive.